UK GDP Jul12.pngTomorrow sees the opening of the 3rd London Olympic Games. As promised, the blog today looks at the change in GDP per capita in the UK economy since the 2nd London Games in 1948

GDP per capita is the best measure of a country’s standard of living. It shows how the economy has grown, in terms of the number of people in the population. As the chart shows, the UK has done very well over this extended period of time:

• In terms of money of the day (red line), GDP/capita has grown from £239 in 1948 to £24168 last year
• Adjusting for inflation (green line), it has grown 338%. The UK thus ranks 22nd in the world

This confirms that western countries still enjoy much higher standards of living than anywhere in the emerging economies, thanks to the arrival of the BabyBoomer generation. China, for example, is in 88th place with just 14% of the UK’s GDP/capita.

Of course, nothing lasts forever. The green line also highlights how the UK’s GDP/capita has begun to slip in recent years. Policymakers have failed to recognise the importance of demographics, and have ignored the potential impact of the ageing of the Boomers on the economy. But that is tomorrow’s problem.

Today, the blog is preparing to cheer on the athletes who have gathered from all over the world. And it will be cheering especially for Beth Tweddle, daughter of its former ICI colleague Jerry Tweddle, in the gymnastics. A gold medal to accompany her world championships would be a marvellous achievement.